Credit Card Consolidation

By Steven M White

A credit card allows you to make purchases to a certain amount, which is allowed by the bank from which you purchase the card. The vendor is reimbursed by the bank when you pay with your credit card and at the end of every month you pay the bank what you owe. You can have a number of credit cards. However, with many credit cards, you have to face the situation of making payments for every one of them at the end of the month.

Debts consolidation is the process of bringing all your debts into one single debt and repaying them back at a lower rate of interest to the lender. You can consolidate you credit card debts into one single debt also.

Many people choose to consolidate their credit card debts, because it keeps them free from hassles of having to pay too many different credit card bills every month. With consolidation they have to only pay to one lender.

Before you decide which credit cards you wish to consolidate, look into each of the credit cards you have and find the one with the lowest interest rate. Next find out the new rate that you have to pay when you consolidate them. If the new rate is lesser than the interest rate you are already paying on the card, then opt for consolidation.

Thus, consolidating the money owed on credit card is an option to be taken when the interest rate you pay for the amount owed on one credit card is different from the interest rate you pay for another one. When you consolidate you credit card debts into one with a lower interest rate, you will be able to pay back the amount owed faster. Rather than letting your money going into paying for a larger interest, you see more of it going towards paying the money owed and in course of time you finish paying of the whole debt amount.

When you consolidate you credit card debts, your credit ratings improve. This is because the new repayment amount is lesser than the previous one, owing to lesser interest rates. You have money to spare and put into other things and plus you can use the extra money to make higher payments on their credit card debts and thereby finish paying them off faster.

Steven M White, a freelance financial consultant with fifteen years experience.

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Credit Card Consolidation - Can Consolidation Save You Money?

By Robert Livingston

Credit cards have become a way of life for most individuals and families. The convenience of credit cards has led to their increased usage and with that increasing credit card debt. The statistics on the average credit card debt held by consumers is staggering at nearly $9000 by the average American said the Consumer Federation of America in a recent report. Credit card debt is not simply a problem because of the average amount owed, but also because of the interest rate charged, which only increases the amount of debt and makes it much more difficult to pay off. If you were to pay just the monthly minimum on $9000 of credit card debt at 18% interest, it would take approximately 42 years to pay off that debt. That's a long time to pay for that new television you so desperately wanted and probably don't have after 42 years.

With increased credit card debt, many of us are threatened by surmounting debt issues and many of us are looking for solutions besides bankruptcy since in 2047 we probably don't want to be paying for that now obsolete and probably non-existent television we bought way back in 2005. One possible solution is debt consolidation.

How can debt consolidation help with credit card debts?

While there are several ways to go about debt consolidation, if you are not quite in a position where you need a debt counselor and debt management plan and your credit is still in good shape, you may be able to consolidate your credit card debt with a bank loan or transfer your credit card debt to a lower interest credit card. The benefit of both is that you only have one monthly payment to make and the interest rate is usually substantially lower. If you transfer your debt to a lower interest credit card, you need to exercise some caution, though. Some credit cards offer special interest rates when you do a balance transfer, but this lower interest rate may not always be fixed until you pay off the debt. It may only last a few months and then the rate goes right back up. If you go this route, managing your debt may be easier than if you have to pay to several lenders, but much more difficult than if you were to consolidate with a single loan because you need to continually calculate interest rates and how they will affect your credit card debt.

Here's an example of how obtaining a lower interest consolidation loan or transferring to a lower interest credit card can affect your credit card debt:

Let's say you have $1000 in outstanding credit card debt with an average (APR) of 18%. If the outstanding balance remains at $1000, over the course of a year you would pay approximately $180 in interest charges alone. If you consolidate your credit card debt into a single loan with a lower interest rate or if you do a balance transfer onto a credit card with a low interest rate you would save a significant amount of money.

If the new loan or credit card have a 9% APR, the amount you pay in interest charges would be half of the higher interest cards meaning you would save roughly $90 in interest charges over the course of that same year. If you save $90 for a debt of $1000, then think about a debt of $10,000. You will save about $900 just in interest alone and pay down the debt that much quicker.

The author of this article runs CreditManagement101.com and is currently a Ph.D. student writing articles on the issues of credit and debt management based on personal experience and many hours of research.

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Credit Card Consolidation: Important Facts About Credit Consolidation

By Ed Vegliante

Credit card consolidation has been catching on as a popular and smart way for consumers to reduce their debt levels. The way that credit card consolidation works is like this: you obtain a new credit card with a nice size credit line and then transfer many of your outstanding loan balances over to the new card. Instead of paying 17.9%, 21.6%, or even 24% or more on credit card balances, a new low interest rate credit card can allow you to reduce your monthly payments and pay down your debt faster. Please keep reading for examples on how you can take charge of your debt.

Out with the old, in with the new

Much of the debt owed by consumers is through credit cards. If you have 1, 2, 3, or more cards, you probably are paying high interest rates on several of your outstanding balances. Your JC Penney, Macys, even your regular Visa or MasterCard can be charging you interest rates in excess of 20%! You can get out from underneath these burdens by selecting a new card with a low APR and transferring your balances over. In effect, you have created a credit card consolidation with your new card. Just don’t use your old cards again as you might find yourself with more debt than you can possibly manage!

Lower monthly payments, low APR

By transferring your high balances, you can save several hundred dollars per year in interest payments. With some cards, you can even get an introductory APR of 0% for the first twelve months. After that your variable rate is likely to be lower than what you paid for your store cards, bringing home big savings for you. In addition, you will have more money to pay off your existing balances faster. In effect, a credit card consolidation can help you get out of debt quicker. Less debt, better credit rating

By paying off your debt faster, your credit rating will improve. An improved credit rating can have a positive effect on future borrowing, especially if you are considering purchasing a new car or a home. All of this good stuff happens because you made the smart decision to go the credit card consolidation route to attack your debt.

Is everyone eligible for a credit card consolidation card?

Unfortunately, that answer is no. If you have very bad credit you likely will not be eligible. Still, unlike a debt consolidation loan done through your bank’s lending department, there are no application fees to apply for a credit card. So, go ahead and apply and you just may find yourself selected to carry a little piece of plastic that can go a long way toward helping you to achieve credit card consolidation.

Copyright 2006 Ed Vegliante. Free reprints of this article are allowed provided the resource box remains intact with a live link back to http://www.credit-card-surplus.com.

Click here to consolidate your high interest balances with a Balance Transfer Credit Card.

Ed Vegliante runs the website http://www.Credit-Card-Surplus.com, a well organized credit card directory enabling the consumer to compare and apply for a variety of credit card offers. View more Credit Card Articles.

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How to Deal with Credit Card Debt: All about Credit Card Consolidation

By Ed Adubofuor

It is a fact that handling too many things at the same time can be very confusing, tiring and sometimes, can be very dangerous. Everything from work, relationships, or family can be very difficult to handle at the same time. It literally takes away your focus and often results in making you less efficient.

In credit cards, having too much of it is very dangerous. It is found that an average person carries about seven credit cards and all of which are actively being used. Managing these much credit cards can be a very hard task to do.

For example, if you actively use all of your credit cards, it can be very hard for you to keep track of all the credit card expenses you make. You should be aware on how often you use each of the cards and also the varying interest rate of each credit card. Most people realize that it is very important to keep track of all the credit card expenses a little too late. People often go into a considerable amount of debt without even knowing it.

It is a fact that credit cards are one of the most useful things you can have and can be a very convenient tool in emergencies. However, you need to know that the possibility of getting into debt when you use a credit card is very real.

When you go into a considerable amount of debt in credit cards, there are solutions that you can do to pay it all off. One example is to do credit card consolidation. Credit card consolidation is basically transferring all the debts you incurred in your other credit cards and pay it off through a single credit card with a low interest rate.

Credit card consolidation can relatively give you a lot of advantages when it comes to paying off your other credit card debt.

- Payment Manageability - Since you will be paying your other credit card debt with a single credit card, this will help you keep track of your payment bills in a much more effective way. Also, this tends to decrease stress and worries than receiving a series of bills.

- Lower Interest Rates - Different credit cards means different interest rates. By transferring your other credit card debts into a single credit card with the lowest interest rate, you can be sure that you can stop accumulating more debt through higher interest rates from other credit cards.

To start consolidating your credit card debt, you first need to look and compare the interest rates of your credit cards. If it is the same, you don't need to consolidate your credit card debt. However, if you found a credit card with a lower interest rate, you can consolidate your credit card debt into the credit card with the lowest interest rate.

The best solution to all of this is not getting into debt at all. Getting into debt can be a very frustrating and unpleasant experience. Always remember that credit cards should only be used for emergencies. It should be used only when you need to use it and not when you want to use it. If you use your credit card to pay for utility bills, for food and other primary needs, you may need more than credit card consolidation to handle a credit card debt.

If you do get in debt however, you can always consider credit card consolidation as a way to pay it all off without worrying too much.

Ed Adubofuor offers low interest credit cards for business, students, or personal use while consolidating and eliminating bad credit debt. Apply for a credit card today!

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Make Credit Card Consolidation Work For You

By joseph hanoa [ 19/10/2006 ]

If you owe money on several credit cards, then credit card consolidation can work for you. You may not be able to tackle all of your debt at once, but you could find that a significant portion of your credit card expense has been removed due to a credit card consolidation. Are you looking to get out of debt? If so, a credit card consolidation may be the most useful tool for you.

Owing money on credit cards is no fun, especially when those cards carry large balances and the interest being charged is too high. You may be able to make the minimum payments, but achieving a big dent in the dent can be almost impossible to bring about. Fortunately, a credit card consolidation can help reduce your costs and remove some debt. When shopping for a new card make certain that it offers the following for you:

Balance Transfers – Your goal is to transfer at least a portion of your debt from a high rate card to a new card offering a low, fixed rate. Look for a card that charges no annual fee, waives balance transfer costs, and offers you a fixed rate on your new balance until it is paid off.

Rewards Too – While seeking a card that offers a great balance transfer offer, why not get rewarded for making the switch? Find a card that offers free airline miles, hotel stays, travel discounts, and other incentives to help you get ahead of the game.

Trimming Back Remaining Balances – If your good fortune helps you find a card that will pay off all of your existing balances, and then you are in luck. If not, then start working on reducing your debt by paying off the smallest loan first, followed by the next largest, and the next largest one after that. You can take your time paying off the new card’s balance especially if you received a fixed, low rate for the life of the balance. Compare paying 4.9% to 15.9% or more and you’ll quickly see the value of working on your other debt first.

In some cases you may be able to get two new credit cards at the same time offering similar benefits. If that should be the case, then use both cards to attack your debt. Together, the new cards may offer good enough balance transfer options to help you completely erase the balances on your old cards.

About the author:

Joseph is the proud owner of Finance Guide, a website that will
explain everything you need to know about Personal Budgets. We invite you to visit our site today and see what we have to offer.


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